Loss damage waivers

Getting angry with Dollar Thrifty

THE PLAINTIFFS in two lawsuits filed recently against Dollar Thrifty claim that the rental car company, which Hertz bought last year for $2.56 billion, sold customers insurance they had verbally declined. The lawsuits, which were noted by the New York Times on Saturday, allege that Dollar misled the plaintiffs into thinking that by signing for a "loss damage waiver", they were waiving insurance, not buying it.

Much of the car-rental experience seems to be centred on convincing customers to pay add-on fees for services that are not strictly necessary and are not included in the base price. This is true almost everywhere, because the rental companies have emulated the airlines' move towards fee-heavy business models. Renting a car is too often an exercise in saying no—to the fuel service, the roadside assistance, the add-on insurance, the toll pass. Dollar Thrifty and its competitors should consider offering superior, hassle-free service and see if that works better than nickel-and-diming their customers.

That said, this is a tough case. As the Times notes, it has many elements of a he-said-she-said story. Dollar Thrifty, which has denied its customers' allegations, has records of its customers signing for the loss damage waivers. Even if security tapes are obtained showing that many of the customers in question verbally declined the waivers, Dollar Thrifty could still argue that some of them simply changed their minds and signed for the waivers anyway. That said, defending the case (which the company has vowed to do) could get expensive and the negative publicity could damage the brand.

The Times has a nice exploration of alternatives to class actions for customers who have these sorts of problems. But some of the options the paper mentions—writing to the company and talking to your credit-card issuer—did not work in this case. The Times's other suggestion—taking the company to small-claims court—can be stressful and time-consuming. My solution to being disappointed in this way is simple: I don't give the company my business ever again. If the upset Dollar Thrifty customers cannot win their case or get the company to settle, they could always try that, too.

Readers' comments

In reality I would argue that rental car companies have been using a fee-oriented business model for far longer than most airlines have, so I don't think the rental cars are looking to emulate the airlines as a model.

I made exactly that decision--never rent from them again--with Budget (also owned by Hertz?), when they refused to provide me with a new rental after I got into a minor collision.

The collision damage was covered by my car insurance and the deductible by my credit card; I had waived the collision damage waiver, so to speak. Budget told me I should have bought the collision damage waiver because then they would have provided me with a replacement car. But since I hadn't bought the overpriced extra, they wanted nothing to do with me. So now I want nothing to do with them.

Avis recently miscalculated the miles driven on which they calculate their fuel charge when I rented a car from them. I didn't notice it at the time I returned the car. Once back home, I noticed the mistake, sent an email to Avis customer support with the estimated miles driven based on my destinations and got the excessive fuel charge credited back to my credit card without questions asked. Now that's service!

Thrifty are hideous, at SLC in particular. I've been whacked with large and vague additional charges that I was informed were compulsory when it was not the case, and forced to prepay for an entire tankful of fuel of which I was going to use barely a third. The array of taxes and fees levied by "low-tax" Salt Lake City and Utah was horrendous. Then there's the barrage of fear tactics to get you to sign up for overpriced collision insurance.
I now avoid leisure travel that involves renting cars because the experience is so routinely negative.

I usually rent from Avis also. When they screwed me in Italy in 2005, I wrote them and they fixed it. And when I locked the keys in the car in Canada in 1986, they bailed me out of my own mistake no charge.

I've always thought LDW is a rip-off. Your insurance will cover you in the event of an accident, unless you have a really terrible provider. In fact the only add-on I ever get is a toll tag, which does come in really handy in places with lots of toll roads. The rest of them, however, are just ways to separate consumers from their money.

Now that I recall, the support rep for Budget, who also worked for Hertz, was appalled herself. She said Hertz doesn't have that rule of dropping a customer who fails to buy the collision damage waiver, but Budget does.

Recently I rented a car in Florida. It was supposed to be a pretty small vehicle, and I used airmiles to pay for it. It still cost me $500 for a week.

The whole thing is a ruse. The counter staff are clearly trained to dress up all these extras in semi-legalese, and make it unclear what you do and don't actually legally need. In addition, airports see it as a wonderful way of fleecing unsuspecting tourists by piling on local "taxes".

Next year, I'm getting limo service, renting a bicycle and sticking out my tongue as I sail past the rental car line.

The thing is to avoid unpleasant surprises. It's OK to offer something the customer didn't initially plan to take but which he might be happy to pay extra for. An upgrade to a bigger car for example. It's OK-ish to charge separately for things that customers think ought to be included but know they aren't, as long as you are transparent about it. It's not OK for a customer to walk into the rental office expecting to pay X and ending up paying Y for no apparent reason.